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Governor Will Not Seek Medicaid Expansion in FY 2015 Budget Proposal

Pledges to find better ways to meet the health care needs of Alaskans

November 15, 2013, Anchorage, Alaska – Citing the failure of Obamacare, the enormous current and future Medicaid costs to Alaska, and greater uncertainty about the federal government’s ability to pay its share, Governor Sean Parnell today announced he will not seek to expand Medicaid in his FY 2015 budget proposal.

“Obamacare has failed to launch, is failing to deliver on its promises, and remains in disarray. Expanding one of its largest, most costly parts will undoubtedly negatively impact Alaskans,” Governor Parnell said. “More people are losing their insurance policies and paying higher premiums with higher out-of-pocket costs. Some Obamacare deadlines have been extended, while others have not, unbundling Obamacare’s package of interdependent trade-offs. As a result, health care is becoming less affordable and less accessible, as we witness what appears to be the destruction of the private insurance market.”

The State remains committed to funding the safety net of health care services already available to people below 138 percent of the federal poverty level (FPL). The State will also work to better communicate with income-eligible Alaskans about health care services available to them now at no cost. Governor Parnell has been meeting with health care providers from across Alaska, discussing the adequacy of Alaskans’ safety net and the level of uncompensated care providers give to those in need.

Governor Parnell noted that Medicaid is already one of Alaska’s biggest and most costly government programs. At a cost of $1.5 billion per year, the program covers approximately 140,000 Alaskans, which averages to roughly $11,000 per Alaskan covered. By 2020, without Obamacare’s Medicaid expansion, Alaska’s current Medicaid program costs are expected to grow from $1.5 billion to $2.5 billion. With the Obamacare Medicaid expansion, Alaska’s Medicaid costs will skyrocket.

“Effectively, the State’s operating budget would then revolve around the expanded Medicaid program,” Governor Parnell said. “This decision has to be about setting policy that helps the poor, without saddling future generations with the debt and risk. Attaching a costly Medicaid expansion to a flagging national health care program is like buying a high-priced ticket on a sinking ship. If Obamacare rights itself in the years ahead, and begins to deliver on its promises of more affordable and accessible health care for all, the State of Alaska can reevaluate whether to expand Medicaid in this way.”

Governor Parnell announced the creation of an Alaska Medicaid Reform Advisory Group to address Medicaid’s structural issues and propose meaningful reforms to the State’s Medicaid program. The group will address three key reform mandates:

  • Stability and predictability in budgeting;
  • Increasing the efficiency of navigating the system by providers; and
  • Providing whole care for the patient by uniting physical and behavioral health treatment.

The governor has also directed the commissioner of Health and Social Services to develop a report defining the current status of Alaska’s safety net for those non-Medicaid-eligible Alaskans up to 100 percent of the FPL. Additionally, the commission is to report on the linkage between uncompensated care by providers, and higher health costs and premiums for Alaskans.

A copy of the Lewin Report is available at: http://gov.alaska.gov/parnell_media/resources_files/lewin.pdf

gov.state.ak.us

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